Questions to Ask When Comparing Financial Advisors
Questions to Ask When Comparing Financial Advisors
Choosing an advisor is a high-stakes decision. The questions below are designed to help you understand an advisor’s legal duty, compensation, conflicts of interest, and how advice is delivered—especially when comparing an independent Registered Investment Adviser (RIA) with a big bank or broker-dealer platform.
For primary disclosure documents, you can request and review an advisor’s Form CRS, Form ADV (if applicable), and BrokerCheck record.
Legal Standard and Fiduciary Duty · Registration and “Which Hat Are You Wearing?” · Compensation and Incentives · Products, Shelf Space, and Platform Constraints · All-In Costs and Fees · Planning Process and Advice Delivery · Custody, Portability, and Client Protections · Disclosures and Documentation to Request
Legal Standard and Fiduciary Duty
1) Will you acknowledge in writing that you are a fiduciary at all times for all advice and recommendations?
This question helps clarify whether the advisor is obligated to act in your best interest across the entire relationship, or only in certain contexts.
Follow-up: “If not, when are you not acting as a fiduciary?”
2) What standard applies to my relationship—fiduciary, “best interest,” or suitability—and where is that standard described?
Ask the advisor to point you to the specific disclosure document (often Form CRS, broker-dealer disclosures, and/or Form ADV) that describes the standard of conduct.
3) How do you identify, disclose, and mitigate conflicts of interest?
Listen for a clear explanation of (a) what the conflicts are, (b) how they are disclosed, and (c) what the firm does in practice to reduce them.
Registration and “Which Hat Are You Wearing?”
4) Are you a broker, an investment adviser representative, or both? When do you switch roles?
Many professionals are “dual-registered.” This question helps you understand whether recommendations are made under an advisory relationship, a brokerage relationship, or a combination.
5) Which accounts will be managed under an advisory agreement, and which will be brokerage accounts?
This is important because the relationship, disclosures, and compensation may differ by account type.
6) Who is your supervising firm (bank, broker-dealer, RIA, or hybrid), and what products or services are affiliated with that firm?
This can help you understand whether the advisor’s employer offers proprietary products, affiliated managers, banking/lending services, or other programs that could create incentives.
Compensation and Incentives
7) How are you personally compensated—salary, bonus, commissions, trails, “grid” payout, or referral credits?
A clear answer should describe how the advisor is paid and whether compensation varies by product, account type, or asset flows.
8) Do you receive different compensation depending on what you recommend (for example, mutual fund share class, annuity type, structured products, proprietary programs, or banking/lending solutions)?
This helps identify whether recommendations could be influenced by differential compensation.
9) Are there incentives tied to bringing in new assets, retaining assets, using specific platforms, or meeting production targets?
Many large firms use incentive structures linked to growth, retention, or product/platform utilization. Ask for a plain-English description.
10) Does your firm receive third-party payments related to investment products (for example, revenue sharing, marketing support, sub-TA, 12b-1 fees, or similar arrangements)?
If the answer is “yes,” ask: “Where is this disclosed?” and “Does it vary by product provider?”
11) If you refer me to other services (banking, lending, insurance, trust services), do you receive compensation or credit for that referral?
Ask how referrals are compensated and whether referral activity can affect bonuses, awards, or internal recognition.
Products, Shelf Space, and Platform Constraints
12) Do you use proprietary products or affiliated managers? If yes, what is the rationale and how do you evaluate alternatives?
This can help you understand whether the platform encourages “in-house” solutions and how the advisor compares them to non-affiliated options.
13) Do you have an “approved list” or platform shelf? How does an investment product get on that list?
Ask whether there are limitations on what can be recommended and whether the firm’s selection process involves commercial arrangements with product sponsors.
14) What products or strategies are restricted or not available due to firm policy, platform limitations, or compliance rules?
Every platform has constraints. The goal is transparency about what is and is not available and why.
15) Are you able to select the lowest-cost share class available for a given fund? If not, why?
This can reveal whether the platform or compensation structure influences share-class selection.
All-In Costs and Fees
16) What is my estimated all-in cost (in dollars) for the first year?
Ask the advisor to include: advisory fee(s), product expense ratios, platform/clearing fees, transaction costs, manager fees, and any surrender or exit charges, if applicable.
17) Are there any fees that are “embedded” in products or paid indirectly (for example, fund expenses, insurance costs, riders, spreads, or sponsor fees)?
Ask how these costs show up in disclosures and statements and how they affect long-term outcomes.
18) Do you receive any compensation that is not fully reflected in the advisory fee I pay (for example, commissions, trails, or third-party payments)?
If yes, ask for a specific description and where it is disclosed.
Planning Process and Advice Delivery
19) What does your planning process look like (deliverables, timeline, and how the plan drives decisions)?
A strong answer should describe the scope of planning, how recommendations are documented, and how progress is reviewed over time.
20) How do you coordinate with my CPA and estate attorney—and what do you provide them?
Listen for specifics: proactive coordination, clear written summaries, and structured decision support. Also clarify whether the advisor provides tax/legal advice or coordinates with licensed professionals.
21) How are investment recommendations made—by you, a home office committee, a centralized model, or a third-party strategist?
This helps you understand who is accountable for portfolio design and changes, and how customized the approach will be.
22) How do you handle rebalancing, tax management, and portfolio changes during volatile markets?
Ask for the firm’s general approach (discipline, policy-based decisions, documentation) rather than market predictions.
Custody, Portability, and Client Protections
23) Where will my assets be held, and who is the qualified custodian?
Clarify whether assets are held at a third-party custodian and in whose name the accounts are held.
24) If we part ways, can I transfer my accounts “in kind” to another firm? Are there holdings that may be difficult to move?
This helps identify portability issues, restrictions, surrender schedules, or proprietary holdings that may complicate a transition.
25) Will I receive account statements and trade confirmations directly from the custodian/brokerage firm?
This is a basic but important control: clients should generally receive independent statements and confirmations.
Disclosures and Documentation to Request
26) Can you provide your Form CRS and explain it in plain English?
Form CRS is intended to summarize the relationship, fees, conflicts, and standard of conduct. Ask the advisor to walk you through it.
27) If you are providing advisory services, can you provide your Form ADV Part 2A and 2B?
Form ADV typically describes services, fees, disciplinary history (if any), and conflicts. Ask which sections address fees and conflicts.
28) Can we review your BrokerCheck record together?
This can help you understand employment history, registrations, and disclosures. Ask about any items shown and the context around them.
29) What professional designations do you hold (e.g., CFP®, CFA®, CPA/PFS), and what do they require?
Ask what education, ethics requirements, and continuing education standards apply, and whether the designation is in good standing.
30) Can you summarize your top conflicts of interest specific to my relationship—and how you will address them?
Ask for a specific, relationship-based summary rather than generic statements.
Want help interpreting the answers?
If you’d like to compare advisory relationships and understand what the disclosures mean, we invite you to request an introductory conversation.
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Information on this page is provided for general informational purposes only and should not be construed as legal, tax, or investment advice. Advisory services are provided only pursuant to a written agreement. Prospective clients should review applicable disclosures, including Form CRS and (if applicable) Form ADV, and may review BrokerCheck and other public resources when evaluating an advisor.